Why Genedrive shares are looking so good
9th December 2021 07:32
by Alistair Strang from Trends and Targets
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The shares have quadrupled in just over two weeks, but how much further can this rally go? Independent analyst Alistair Strang checks out the charts.
We’ve never been entirely comfortable that we understand where ratings actually come from when shares are being discussed. Genedrive (LSE:GDR) is a case in point, currently assigned with a “Strong Buy” technical rating. We opted to poke around and there’s the usual nonsense, references to upward channels, discussion about moving averages, along with inevitable comments from true believers, deciding it’s a buy no matter what.
The reason we’re somewhat flippant is simple. The share price has achieved a high of 74.75p and closed a session at 63p. As the chart for the last year highlights, the price is now above the immediate downtrend and also is trading higher than at any point since June.
We’re great fans of 'higher highs' and feel a chart unadorned with colourful technical indicators, should be give sufficient information to those who fail to understand technical indicators.
We’ve shown two identical charts below, the upper one focussed on the level at which the share price closed. The lower one is decorated with colourful candles and the important thing is straightforward. Both charts give an impression of a share price which looks very capable of future gains for this established molecular diagnostics company.
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Near term, above 68p now looks capable of further price recovery to an initial 81p with secondary, if bettered, at 92p. Our secondary is an important point, a level where the share price requires close to enter quite a different cycle of price movements.
Long story short, closure above 92p allows an initial 123p with secondary, if bettered, a distant looking 160p.
Strictly speaking, if everything intends to go pear-shaped, the share price requires below 33p to justify panic. This obviously gives a heck of a lot of wriggle room for the price in the months ahead and, unfortunately, the earliest warning looks like it shall come if the price closes a session below 41p.
Source: Trends and Targets. Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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